Opinion: Remind me - why do we bother with Atol?

Opinion: Remind me - why do we bother with Atol?

Mike Russell, chief executive, Vertical SystemsWhy do we bother with Atol?

I look with disbelief at the developments in the consumer protection arena and wonder how much longer Atol holders will tolerate losing market share to those businesses who operate outside the regulations.

Like many modern agents we sell very much the same products as Travel Republic, On the Beach, easyJet Holidays and the like, in the same manner.

However, we have always chosen to treat our sales as packages and provided our customers with the financial protection and security that this entails. After all, this is the guidance given by the CAA and Abta.

I only wish that the customer placed some value on this. Consumers have no faith in any form of bonding following years of confusion and trouble – their only real certainty is to pay with a credit card and manage their risk in that way.

So not surprisingly, they choose to purchase based upon price alone. This drives them to the ‘outsiders’ who operate the lowest-cost model.

Over recent years we have watched these ‘outsiders’ flourish and take huge chunks of market share. No doubt they are excellent businesses but they also benefit hugely from steering clear of the nightmare that is operating as a principal in such volatile times.

They don’t have to pay to top up the Air Travel Trust Fund (ATTF). They don’t have all the administrative burden of dealing with the CAA. Most importantly they don’t take tour operator risk: when a supplier fails, they don’t have to buy new flights or accommodation at inflated prices. They get the CAA to pay out.

I am not critical of these people – in fact, I admire their balls. They have been very shrewd and chosen the lowest risk, lowest cost model by choosing to keep outside the net. They even get the CAA to pay their legal fees.

Nor will the introduction of Flight-Plus bother them one bit. Incredibly, the scheme seems to be put together with ready-made loopholes so that the ‘outsiders’ won’t be bothered by the inconvenience of tour operator risk, APC contributions and so on.

They will simply adopt the ‘agent for consumer’ route and skip happily along while the rest of us continue bearing all the risk, costs and regulatory burden.

That, of course, doesn’t include the airlines – why should they be bothered with all the hassle? It’s far better for them to let us sell their flights for zero commission, taking enormous risk, and then undercut us because they don’t have to pay the costs of topping up the ATTF.

So Flight-Plus will just continue to penalise us in same way as the old scheme. Those smart people outside the scheme will continue to look on and laugh as we shoulder all the risk and pain.

And should one of these large businesses outside the net fail, will the directors be troubled by unlimited personal guarantees to the CAA?  Of course not. If one of their customers suffers from holiday disruption due to the failure of a supplier, will they have any sleepless nights? I suspect not.

The only solution is an even playing field, a simple levy applying to all outbound flights however sold and collected via APD, to top up the ATTF and to cover the costs of repatriation.

Until this happens, those of us who accept the spirit of the legislation and participate in either the current scheme or the new Flight-Plus arrangement will be at a huge disadvantage to those who do not. This will inexorably lead to a loss of market share to the ‘outsiders’.

So remind me – why do we bother with Atol?


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